Self Storage REITs – Buy Shares!

REITs So you are interested in investing in Self Storage, but, may not have a large enough lump sum to buy a free standing self storage facility.  Do not be discouraged, did you know that you can buy shares in Publicly traded companies that specialize in Self Storage Investments?

There are three REIT categories: equity, mortgage and hybrid.  We are only interested in the equity REIT, since we are not involved in the mortgage markets.

Equity REITs

Equity REITs (EREITs) purchase, own and manage income-producing real estate properties such as apartments, malls and office buildings. Equity REITs are different from typical real estate developers because they purchase or develop real estate to operate it as part of their portfolios instead of developing it for resale. Equity REITs are considered superior for the long-term investing because they earn dividends from rental income as well as capital gains from the sale of properties.

Although some REITs have a broad focus and invest in a variety of property types in a range of locations, many REITs focus their investments either geographically or by property types. An individual REIT may hold properties only in a specific region, state, or metropolitan area. Or, it may hold properties across broader geographical areas but focus on healthcare facilities, apartments or industrial facilities.

The National Association of Real Estate Investment Trusts (NAREIT) divides REITs into three classifications based on how they can be purchased: private, publicly traded and non-exchange traded.

There are nearly 200 publicly traded REITs that registered with the SEC and traded in major stock exchanges. Because these REITs are traded on an exchange daily, they are simple for investors to buy or sell and offer great liquidity. Total assets of these listed REITs exceed $400 billion.  Private REITs generally are subject to less regulation, with the exception of guidelines associated with maintaining REIT status. There are almost 800 private REITs in the United States.

Self Storage REITs – The Profitable Niche!

Self Storage REITs only makes up 4% of the total REIT Industry.  However, it is one of the most profitable, in fact, over the past 5 years it has shown the best Returns on Investment for all REITs.

Self Storage REIT Returns

The Four Publicly traded Self Storage REITs: 

Public Storage
Extra Space
CubeSmart
Sovran (Uncle Bobs Storage)

In 2012, the stocks of real-estate investment trusts in the self storage business posted a total return of 35.4%, the strongest gain of any REIT sector for the second consecutive year. Those results greatly outpaced the 8% return for all REITs, as measured by the Dow Jones All REIT Equity Index.

Self storage has long been viewed as a stable business because it is an expense borne out of necessity. Self storage is a solution to a problem or a challenge that has been life-changing for many individuals. It is not glamorous business, but it is stable and by most accounts, recession-resistant.   It is important to note that during the economic downturn, public-storage companies only suffered mild revenue declines compared with the double-digit drops by other commercial landlords.

More Information about Self Storage REITs: InsideSelf-Storage.com

Perhaps it is time that you consider investing in self storage?  For more information about becoming a private self storage investor, go here now.

 

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